Government Considers Scrapping Import Tax on Life-Saving Medicines

The federal government is evaluating major policies aimed at easing healthcare costs and accelerating digital payments across the country.

Authorities are considering abolishing the 3 percent Value Added Tax (VAT) on imported finished life-saving medicines, currently listed under the 12th Schedule.

According to Topline Securities, this levy has effectively increased the tax burden on essential drugs to around 4 percent, up from an earlier 1 percent GST final tax.

If approved, the move is expected to reduce landing costs for pharmaceutical imports, improve supply chain efficiency, and help lower retail prices of critical life-saving medicines for patients.

In a separate policy direction, the government is also exploring measures to restrict large-scale cash transactions at retail stores, food outlets, and petrol stations. The objective is to promote digital payments and strengthen formal banking channels across the economy.

Tighter limits on cash usage could accelerate the shift toward electronic transactions, improve tax tracking, and gradually expand the country’s digital financial ecosystem.